How Atari's Nolan Bushnell turned down Steve Jobs' offer of a third of Apple at $50,000

Given a time machine, many people might say their first order of business would be to go back to the 70s and buy a big chunk of Apple stock. For Nolan Bushnell, founder of video game company Atari, this is not so much a fantasy as a very real opportunity that he passed up nearly 40 years ago.

Talking to ABC News Breakfast on Molnday, the 72-year-old engineer recounts how a young Steve Jobs — formerly an employee at Atari — asked Bushnell for $US50,000 in return for a third of the newly-formed Apple Computer, and Bushnell said no.

"I've got a wonderful family, I've got a great wife, my life is wonderful. I'm not sure that if I had have been uber, uber, uber rich that I'd have had all of that," he said.

Bushnell is widely credited with co-producing the world's first coin-operated video game in 1971, called Computer Space — a smaller version a game called Spacewar! which was previously confined to massive computers at universities and laboratories. It was a complicated game and not commercially successful.

Advertisement

After the release of the first home video game machine, Bushnell was inspired by the paddle-like controls and simulated tennis match, and he created the arcade game Pong, Atari's first big success.

During this period Bushnell employed Steve Jobs as an engineer, and says he soon became invaluable at "solving problems in the field", including marching into Bushnell's office to explain how terrible other Atari workers were at soldering, and offering to teach them.

Ron Wayne was also given the opportunity to make billions at Apple but passed on it.

"I got him to work the night shift", said Bushnell. "It was a trick ... I knew if I got him to work the night shift Woz (Apple co-founder Steve Wozniak) would show up — he was working at HP — and Woz was a savant, no question about it."

Bushnell said this way he could get "two Steves for the price of one" to build his arcade game.

As Bushnell explained, these early video game machines were made from physical components and no software, and it was his realisation of the potential of microprocessors to overcome this limation — which led to the release of Atari's most recognisable console, the 2600, in 1976 — that really drove video game consoles into homes.

He said this ability to recognise the technical innovations of others and make them marketable was a trait he and Jobs shared.

"We knew we could hire people who were actually smarter than we were in the technical side. But we had this ability to look at marketplaces and technology and sort of mash them together," Bushnell said.

In 1976, when Atari was busy with its 2600 console, Jobs approached his former boss to show off a computer he and Wozniak had made using borrowed Atari parts (they were helped in its manufacture by then-Atari-employee Ron Wayne, another notable almost-billionaire who gave up a 10 per cent stake in Apple).

The new computer was called the Apple I.

Bushnell declined to invest in the machine, and has said that at the time he simply had no interest in home computers.

The Atari founder is in Australia this week to attend the Creative Innovation Asia Pacific conference in Melbourne.